Funding Progress
So far we have raised $215,000 towards our target of $260,000.
Read More »Dividend Payout Plan
Chat House would pay ABE in the form of a variable interest rate of 5%-20% to reduce taxes and avoid double taxation, starting in the 3rd year (first two years interest-free). In addition to the interest payment, ABE has 25% ownership of Chat House, so 25% of Chat House dividends would be paid to ABE and passed on to its owners. 75% of ABE profits would be distributed to investors, and 25% to ABE managers and bonuses. As profits allow, we would intend to pay dividends to investors amounting to 5-18% yearly return on their investment. The minimum investment amount is $1,000 for one unit of equity interest. Investments of less than $1,000 will not be accepted, although they can participate in our crowdfunding campaign that offers tangible non-monetary rewards for funding. Starting after about 5-10 years, Chat House expects to have enough retained earnings to begin paying back some of the loan, at which time investors would be offered a buyout option to sell their ownership and get back their original investment. This time frame is not guaranteed, however, and will depend on the profitability of Chat...
Read More »Profit Sharing and Ownership
The Chat House profit distribution has been structured to prioritize investor returns while rewarding management for profitability; and at the same time utilizing strategies to legally avoid excessive Russian and American taxation. Before distributing dividends to owners, Chat House will pay its interest payment to ABE, most of which will go to investors.
Read More »Start-up Funding at Target Funding Level
Initial investment needed is $320,000. We would need to have commitments for nearly all of this amount by December 31st, 2013, and have all of this investment capital deposited by March 31st, 2014 to meet our target launch date of September 1st, 2014. Table: Start-up Funding at Target Funding Level Start-up Expenses to Fund $100,000 Non-cash Assets to Fund $175,000 Cash Balance on Starting Date $45,000 Total Funding Required...
Read More »Projected Profit and Loss
Chat House would expect to see a gradual increase in gross margin as well as in net profit. Year One shows a predictable net loss which has been taken into account as part of the start-up cash assets needed. We would aim to break even sometime during year 2. Starting in year 3, Chat House would begin paying interest on capital investment.
Read More »Start-up Summary
Coffee Shop startups in the US typically cost from $150,000 to $500,000. Our estimate falls somewhere in the middle of this range. Rent cost in Ufa is significantly higher than in major US cities, and equipment would cost more to import here than it would to purchase in the US, and more legal red tape is needed to register a business here. The other startup costs would be roughly similar to what they would be in the US. The average cost to open a coffee shop in Russia is $270,000, which lines up with our estimate here (with an additional $50,000 in consulting, professional fees to set up the investment company, and travel & training expenses). Included in seed money expenses here are: registration & professional fees, travel expenses, training, and office expenses. Included in start-up expenses are advertising costs and rent & overhead costs during renovation. Included in assets here are contingencies for expected net losses during the first year, initial inventory, coffee & other equipment, and renovation & furnishings for the Chat House retail space. For more details on each line, follow the endnote references in roman numerals after each item. Seed Money Expenses Business Registration, Lawyer, Accountant Fees $14,000 Investment Solicitation Travel Expenses $8,000 Business & Barista & Roasting Workshop $3,000 Office Equipment & Books & Website $5,000 Total Seed Money $30,000 Start-up Expenses Consulting Fees for Training, Proceedure Manuals, Etc. $20,000 Rent and Overhead During Renovation & Startup $25,000 Initial Advertising and Grand Opening $25,000 Total Start-up Expenses $70,000 Start-up Assets Cash Assets for Expected First Year Losses and Contingency for Unexpected Delays $45,000 Other Current Assets (Initial Raw Supplies & Inventory) $11,000 Coffee Roaster & Installation $30,000 Coffee Machines, POS System, Other Equipment $44,000 Leasehold Improvements & Wall Furnishings $60,000 Furniture & Cabinetry $30,000 Total Long-term Assets $164,000 Total Assets $220,000 Total Requirements...
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